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Self Trusteed Retirement Plans Loan - DOC

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									                      ESOP Feasibility/Design Study: Information Request

The purpose of this information request is to organize the information required to determine the feasibility of implementing
an ESOP at your company. In order to evaluate the potential benefits to your company, which would result from the
installation and use of an ESOP, we will require the preliminary information covered by the questions set forth below. Clearly,
the more information we have available, the better the analysis will be. We encourage you to answer all questions completely.

Any figures furnished in response to these questions may be approximate. If you need more room than is provided, please
attach a separate sheet with your answer numbered according to the corresponding section and question.

We understand and agree that any information furnished will be held in the strictest confidence and will not be disclosed to
anyone without your consent.

If you have any questions when completing this form, please contact Robert W. Smiley, Jr. 1 800 922 3767.

Please complete this form and return it to Robert W. Smiley, Jr. at Benefit Capital P.O. Box 542, Logandale, NV 89021-0542.
Fax 702 398 3700. E-mail rsmiley@benefitcapital.com




Date                                      Form completed by


                                    General Company Information
1.      Official company name

        “dba” (if applicable)

        Contact for information

        Reports delivered to

        Address

        City                                                        State                             Zip

        Telephone(s)                                                Fax

        E-mail                                                      Web site address

2.      Does the company have offices, plants, or facilities in more than one state? Yes _____ No _____

        If yes, list locations and number of employees in each location:



3.      Does the company have employees in other countries? Yes ________                     No ________

        If yes, list countries:

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ESOP Feasibility/Design Study: Information Request
4.     Form of Business

       ___ C Corporation                      ___ Sole Proprietorship                         ___ Other
       ___ S Corporation                      ___ Partnership

5.     Publicly traded?       Yes __________          No __________

6.     On a separate attached sheet, please identify any other affiliated or related companies (as well as any
       companies with common ownership over 50%), or check “Not Applicable” below, indicating that no such
       companies exist. For each such company, please provide the specific company information requested below
       and indicate whether each is expected to participate in the ESOP.
              Check here if not applicable _____

       Capital Structure (add additional sheets as necessary to completely describe the capital structure of the
       company):

             Class of Stock              Total Authorized Shares            Issued and Outstanding
       Common
       Other Common
       Preferred

       Current Ownership Information (add additional sheets as necessary to completely describe the current
       ownership of the company):

       Common Stock:
                Owner                        Shares         % of         Age     Employee?      Years of
                                                          Company                 Yes/No        Service




       Other Common Stock:
                 Owner                       Shares         % of         Age     Employee?      Years of
                                                          Company                 Yes/No        Service




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ESOP Feasibility/Design Study: Information Request
       Preferred Stock:
                   Owner                       Shares         % of         Age     Employee?       Years of
                                                            Company                 Yes/No         Service




       Options:
                     Owner                     Shares         % of         Age     Employee?       Years of
                                                            Company                 Yes/No         Service




7.     Description of business (please attach corporate brochure or other materials)




8.     Date incorporated                                        State of incorporation

       Fiscal year end                                          Cash or Accrual

       SIC Code(s)

9.     Identify special shareholder provisions (i.e., preemptive rights, conversion privilege, right of first refusal,
       buy-sell agreements, stock redemption agreements, cross purchase agreements, voting rights, stock
       restrictions, stock options, etc.




10.    Book value per share at end of latest fiscal year:       $

11.    If there have been stock transactions (sales, purchases, newly issues shares, etc.) within the past five years,
       please list and describe the transaction(s) and the basis for determining the price of shares transacted.




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ESOP Feasibility/Design Study: Information Request
12.    List dividends per share paid in the last three years

               Year                    Common                           Preferred




       Any change contemplated?

                                                Key Advisors
Accountant:
Contact Name
Company
Address
Phone
Fax & E-Mail

Attorney:
Contact Name
Company
Address
Phone
Fax & E-Mail

Banker:
Contact Name
Company
Address
Phone
Fax & E-Mail

Depository Relationship:
Contact Name
Company
Address
Phone
Fax & E-Mail

Investment Relationship:
Contact Name
Company
Address
Phone
Fax & E-Mail

Current Lending Relationships (please attached schedules, as necessary, for each lender):
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ESOP Feasibility/Design Study: Information Request
Contact Name
Company
Address
Phone
Fax & E-Mail

Other Consultant:
Contact Name
Company
Address
Phone
Fax & E-Mail


                               Corporate Financial Information
13.    Approximate value of the company:      $

14.    Estimate based on      ___ Owner’s Opinion
                              ___ Recent Offer
                              ___ Appraisal (purpose:                                                       )
                              ___ Recent Stock Transactions (explain:                                       )
                              ___ Industry Conventional Wisdom

15.    Estimated growth in value over the next ten years:                   %

16.    For each of the LAST five fiscal years, please provide:
       (copies of 1120s would be helpful)

      Year      Gross Revenue           EBITDA (earnings          Taxable Income      Fed and State         Tax Rate
                                        before interest, taxes,                        Taxes Paid           Combined
                                          depreciation, and
                                            amortization)




17.    Please attach copies of pro forma budgets and cash flow statements for each of the next ten years.
       Alternatively, you may complete the form at the end of this document labeled “Attachment 1.”




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ESOP Feasibility/Design Study: Information Request
18.    Gross annual payroll – PRIOR three years:

         Year        # Union           Total                # Non-union          Total
                    Employees       Compensation             Employees        Compensation




19.    Gross annual payroll – PROJECTED five years:

         Year        # Union           Total                # Non-union          Total
                    Employees       Compensation             Employees        Compensation




20.    Estimated pre-tax income for current fiscal year ending ______________:       $
                                                                     (date)
21.    Estimated contributions for current fiscal year ending ________________ to:
                                                                     (date)
              Profit sharing plan: $
              Pension plan: $

22.    Lines of credit

        Amount                      Rate                          Maturity Date



23.    Term loans

        Current Balance             Monthly Payment               Maturity Date



24.    Other credit facilities description: please include a copy of any loan agreements, continuing guarantees, and
       other pertinent documentation regarding the above, include UCC filings.




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ESOP Feasibility/Design Study: Information Request

                                        Employee Information
25.    Please provide the percentage of total employees who fall into the following tenure categories (please be
       sure to total to 100%):

        Length of service                % of employees
        1 to 6 months
        6 months to 1 year
        1 to 3 years
        3 to 5 years
        5 to 10 years
        More than 10 years
        TOTAL

26.    Typical annual turnover rates:

        Category                         % of employees
        Executive
        Other management
        Supervisory
        Rank and file
        TOTAL

27.    Union employees:

       Year     Number          Annual Compensation




28.    Non-union employees:

       Year     Number          Annual Compensation




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ESOP Feasibility/Design Study: Information Request
29.    Executive officers and key employees (attach additional sheet if needed):

        Name                   Age     Current position Compensation Years of Service




30.    Other qualified plan information: if a profit sharing plan, 401(k) plan, money purchase plan, stock bonus
       plan, other defined contribution plan, or defined benefit plan was or currently is in existence, please
       complete the following information with respect to each plan:

        Type of plan
        Plan effective date
        Plan year end date
        If the plan is no longer in existence, date
        terminated
        Approximate annual contribution
            Employee
            Employer
        Current market value of plan assets
        Contribution formula
        Is the plan top heavy? (yes or no)
        What is the vesting schedule?
       Please provide a copy of plan documents and Summary Plan Descriptions.

31.    Is there an over-funded defined benefit plan?         Yes _____ No _____ Amount

32.    Does the company sponsor any nonqualified plan?       Yes _____ No _____

       If yes, describe:


                                          Study Parameters
33.    What employees do you wish to be included in the ESOP (salaried, hourly, union, etc.)?



34.    Does the company use “leased” employees?              Yes _____              No _____



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ESOP Feasibility/Design Study: Information Request
35.    Describe the specific contemplated transaction, including any timetable expectations:




36.    Please rank the following in order of importance as a reason for considering an ESOP at this time (use 1 as
       most important):

                     Create an alternative to the sale of the company to outsiders or to a public offering
                     Create succession planning/estate planning vehicle
                     Provide tax favored liquidity for current shareholder(s)
                     Improve corporate cash flow
                     Implement employee benefit
                     Increase motivation and productivity
                     Refinance existing debt
                     Finance acquisition or capital investment
                     Other - describe:

37.    If cash is needed, how much?           $ _________________________________

38.    Using the ESOPs Objectives and Benefits Checklist (at the end of this Design Study Request), please
       carefully review the potential objectives and benefits from the adoption of an ESOP by your company. We
       have provided spaces for you to rank those items of special interest in order of their relative importance.

39.    How did you first learn about ESOPs? What information have you compiled to date? (This will help us
       determine what supplemental information to provide.) Please provide a brief summary of how you became
       acquainted with employee stock ownership plan financing.




40.    Additional comments you have at this time:




41.    If you are considering a self-trusteed ESOP, please indicate the names of the individuals who will serve in
       this role:



42.    With respect to all stock that may be sold to the ESOP, please provide the following:
       - Date acquired by shareholder

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ESOP Feasibility/Design Study: Information Request
       - Indication as to whether the stock was acquired from the company or direct from other shareholders. If
       acquired from the company, was the stock acquired by stock grant, stock purchase, exercise of stock option,
       or other? Please describe.

43.    Please attach the following items:

               Most recent year’s financial statements for the company
               Most recent tax return(s) for the company
               Projections and/or business plan
               Employment agreements
               Stock options and deferred compensation agreements
               Buy-sell agreements
               Company brochure, corporate history description and/or information
               Organization chart
               Qualified plan documents and/or data, including a copy of the plan document, Summary
               Plan Description, Form 5500, administrative records, IRS determination letter, valuation or
               allocation reports
               Employee census (dates of birth, dates of hire, anticipated annual wages, Social Security
               numbers); include a notation to identify any employees or shareholders who will be retiring
               soon. Please provide this information electronically - send flat file, comma delimited, or
               Excel spreadsheet format.
               Other


                                        Regulated Industries
44.    Do you rely on government revenue? If so, to what extent as a percentage of sales?

45.    Do you have special reporting requirements to the government? If yes, please explain:



46.    Are you licensed by the government? If yes, please explain:



47.    Do you require bonding to operate?

       If bonding is required, what requirements do you have regarding financed ratios?




ESOP Feasibility/Design Study – Information Request                                                          10 of 13
                    ESOP Feasibility/Design Study: Information Request


Attachment 1 response to Question 17.

Please provide the following projections for 10 years.


Year               Gross Revenue       COGS              Gross Profit   Operating       EBITDA
                                                                        Expenses




Depreciation       Other Interest      Taxable Income    Tax Rate       Known Uses of   Sources of Cash
Amortization                                                            Cash




ESOP Feasibility/Design Study – Information Request                                              11 of 13
                   ESOP Feasibility/Design Study: Information Request
                                    ESOP OBJECTIVES AND BENEFITS

Please carefully review the following potential objectives and benefits available from the adoption of an ESOP by
your company. Check those items which you find of special interest. We have also provided a space for you to
rank those items of special interest to you in order of their relative importance (10 = highest; 1 = lowest).
Item of                                                                                           Order of
Interest(1)                                                                                       Importance
____________ 1.        Finance future growth with pretax dollars.                                 ____________
____________ 2.        Finance future growth at favorable interest rates.                         ____________
____________ 3.        Finance debt, repaying both principal and interest with pretax dollars.    ____________
____________ 4.        Increase cash flow without increasing sales or revenue.                    ____________
____________ 5.        Motivate employees to regard the company through the eyes of an            ____________
                       owner by letting them share in a "piece of the action" and possibly
                       receive tax-deductible dividends.
____________ 6.        Create a friendly base of stockholders (employees) as opposed              ____________
                       to disinterested speculators in the public marketplace.
____________ 7.        Create a tool to help attract and retain high-quality management           ____________
                       and supervisory personnel while cutting down on employee turnover.
____________ 8.        Encourage employee ownership of closely held company stock                 ____________
                       [without relinquishing voting control? Yes  No    ].
____________ 9.        Improve employee relations.                                                ____________
____________ 10.       Ensure the future growth of the company through increased employee         ____________
                       productivity and increased company profitability.
____________ 11.       Convert present employee benefit plans from pure expense items             ____________
                       and liabilities to vehicles that increase working capital and net worth.
____________ 12.       Remain private, while providing an in-house, liquid market for stock.      ____________
____________ 13.       Enable private shareholder(s) to sell all or part of their holdings at fair ____________
                       market value without the expense and uncertainty of a public securities
                       offering, and defer paying federal capital gains taxes, perhaps indefinitely.
____________ 14.       Create a financial tool for estate planning which can provide              ____________
                       for complete payment of federal estate taxes.
____________ 15.       Divest an incompatible subsidiary without the publicity, expense           ____________
                       and uncertainty of finding an outside buyer.
____________ 16.       Acquire a company with pretax dollars, and amortize acquisition            ____________
                       financing with pretax dollars.
____________ 17.       Provide for the potential recapture of the prior three years' federal      ____________
                       income taxes.
____________ 18.       Use in conjunction with takeover defense strategy, retiring stock, or      ____________
                       “going private”.

____________ 19.       Increase the yields to stockholders.                                       ____________

(1)    H = High, M = Medium, L = Low

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ESOP Feasibility/Design Study: Information Request
                                    ESOP OBJECTIVES AND BENEFITS


Primary Objectives

The following illustrate the most common potential uses of employee stock ownership plans. Please rank in order
of priority those applications which interest you.

       Rank Objective

       ____    Increase cash flow by creating tax deductions with stock and/or cash contributions.

       ____    Transfer business to key employees on a tax-favored basis.

       ____    Refinance existing debt at more favorable rates with pretax dollars.

       ____    Create a tax favored market for shares of stock held by current shareholders.

       ____    Estate planning (both before and after death) for one or more shareholders.

       ____    Increase employee motivation and productivity through ownership participation.

       ____    Create an alternative to sale of the company to outsiders or to a public offering.

       ____    Divest a subsidiary -- acquire an existing subsidiary or division -- or finance the acquisition of a
               company or business.

       ____    Convert existing pension/profit sharing plan(s) from pure expense items to tax-saving or corporate
               finance vehicles.

       ____    Charitable giving.

This Transaction

Please describe the potential transaction in which you feel an ESOP may be useful (e.g., "Majority shareholder is in
his late 60s and we need to prepare for succession" or "Use ESOP to refinance $1.5 million of existing debt," or
"Buy out uncooperative minority shareholder," or "Increase company cash flow by reducing taxes and/or cash-
based retirement plan costs," etc.). Please be as specific as you can.

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

2003 BENEFIT CAPITAL COMPANIES INC.
(from09000934.do c)




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